Central banks buy Treasuries
Analysts at Wells Fargo Securities point out that US Treasuries are becoming more popular among foreign reserve fund managers in comparison with what was in 2013. In the past 4 months, the net purchases of Treasuries by central banks have increased $16.8 billion per month on average. Wells Fargo underlines, that this is more than enough to offset the decrease in purchases which happens as the Fed tapers QE. This partly explains why 10-year Treasury yield slid to 2.40% in May.
Source: United States Department of the Treasury and Wells Fargo Securities, LLC